Carney: bankers "got away with it"

Tuesday 14 October 2014

Bank of England governor Mark Carney has taken a swipe at reckless bankers who despite causing the financial crisis got away with big pay packages and are "still at the best golf courses".

Mr Carney also indicated that board members unhappy with new rules meaning they could face jail sentences for banks' wrongdoing ought to resign.

His remarks came amid reports that two senior HSBC executives are to quit because of the new misconduct rules. Mr Carney was speaking at an event at the International Monetary Fund's annual meeting in Washington.

He reportedly said: "One of the legacies of the crisis in the US and by and large in the UK was that the individuals who ran the institutions got away. They got away with their compensation packages, they got away without sanction. Maybe they were not at the best tables in society after that, but they're still at the best golf courses. That has to change."

Mr Carney did not directly address the matter of the HSBC bankers quitting.

But he said: "If you're chair of an audit committee, you have responsibility for the activities of an institution. And if you don't think you can discharge that responsibility, you shouldn't be on that board."

In a separate speech, Mr Carney said aims to end "too big to fail" - which saw taxpayers have to bail out large banks to prevent economic chaos during the crisis - would reach a "watershed" at next month's G20 summit in Brisbane.

He said: "Operating in a heads-you-win-tails-you lose bubble, the world's largest banks threatened the stability of the global financial system. Their bail-out using public funds undermines market discipline and goes to the heart of fairness in our societies. This cannot be allowed to continue."

Asked whether the Prime Minister agreed with Mr Carney that the bankers responsible for the financial crisis had got away with it, David Cameron's official spokesman told a regular Westminster media briefing: "He would take the view that the Bank of England, which Governor Carney leads, is at the heart of a new system of financial regulation which was and is absolutely necessary.

"Also ... we have reforms which introduced the potential for there to be criminal prosecutions for reckless behaviour, so I don't think you can be in any doubt about the importance the Prime Minister attaches to significant reform."